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At equilibrium, the quantity demanded equals the quantity supplied. In other words, consumers demand the same amount of a good or service as producers are willing to supply. This occurs when the market reaches a state of balance, where the forces of supply and demand are matched, resulting in stable prices and stable quantities.

A shortage occurs when the quantity demanded is greater than the quantity supplied. In this situation, consumers are demanding more of a good or service than producers are willing or able to supply. This can lead to consumers competing for the limited supply, driving up the price. Producers may respond to this increased demand by raising their production levels, which could help to alleviate the shortage over time.

A surplus occurs when the quantity supplied is greater than the quantity demanded. In this situation, producers are supplying more of a good or service than consumers are willing or able to purchase. This typically leads to a decline in prices, as producers compete with each other to sell off their excess inventory. Consumers may respond to these lower prices by increasing their demand, which could reduce the surplus over time. In summary, at equilibrium, the quantity demanded and supplied are equal and the market is in a state of balance. During a shortage, the quantity demanded exceeds the quantity supplied, leading to increased prices and possibly increased production. During a surplus, the quantity supplied exceeds the quantity demanded, resulting in decreased prices and potentially increased demand.